D1 · Cloud Concepts

Cloud deployment models

Public, private, hybrid, and multi-cloud. When to choose each one, which Azure services apply to each model, and the most common exam traps.

The 4 deployment models

The AZ-900 tests 4 models. Many students only study 3 (public, private, hybrid) and lose points on multi-cloud questions.

☁️

Infrastructure operated by a third-party cloud provider (Microsoft, AWS, Google) and delivered over the internet. Resources shared among multiple customers (multi-tenant) though logically isolated.

Examples

Microsoft AzureAmazon Web ServicesGoogle Cloud Platform

Best for

Most companies. Default for new projects.

🏢

Cloud infrastructure used exclusively by one organization. Can be physically on the company's premises () or in a third-party datacenter, but resources are NOT shared with others.

Examples

VMware vSphere on-premisesAzure Stack HCIPrivate OpenStack

Best for

Ultra-strict compliance, predictable performance, total control.

🔀

A combination of public and private cloud (or on-premises) connected together, allowing data and applications to be shared between them. The application can "burst" to the public cloud when the private one becomes saturated.

Examples

Azure Arc (extends Azure to on-prem)Azure VPN GatewayAzure ExpressRoute

Best for

Gradual migrations, compliance with burst capacity, legacy + new apps.

🌐

Multi-cloud

Deliberate use of services from two or more public cloud providers. Not the same as hybrid — it's multiple public clouds (e.g., Azure + AWS). Can also include private cloud.

Examples

Azure + AWS for different workloadsAzure for AI, AWS for streamingGoogle Cloud for BigQuery + Azure for the rest

Best for

Avoid vendor lock-in, take advantage of the best service from each provider.

Public cloud — multi-tenant in depth

What does "" actually mean?

Your VM in Azure runs on the same physical server as VMs from other companies (maybe competitors). The Hyper-V hypervisor isolates them completely at the hardware level. You can't access their data, nor can they access yours. But they share: CPU threads (limited by vCPU quota), physical memory (limited by allocated RAM), and the same physical NVMe disk (though with separate volumes).

Real advantages of multi-tenant

  • Cost: The physical server's cost is split among multiple customers. Cheaper for each one.
  • Economies of scale: Microsoft operates millions of servers → better hardware for the price.
  • Zero maintenance: Microsoft manages the hardware. You don't even know if they replaced the disk.
  • Real elasticity: With shared capacity available, Azure can allocate more resources in seconds.

Risks and limitations of multi-tenant

  • Noisy neighbor: Another customer on the same host uses resources heavily → can affect performance (rare but possible on basic tiers).
  • No control over location: You can't choose which physical server or rack. Azure decides.
  • Strict compliance: Some regulators won't accept shared hardware (defense sector, some banks).
  • Side-channel attacks: Theoretical: attacks like Spectre/Meltdown exploit shared hardware. Microsoft patches them, but the theoretical risk exists.

Solution to noisy neighbor: Azure Dedicated Hosts

If you need exclusive physical hardware in public cloud → Azure Dedicated Hosts. You pay for the entire host, only your VMs run on it. Price: ~$3-8/hour for a complete physical host. Meets compliance requirements demanding non-shared hardware.

Private cloud — real options

"Private cloud" doesn't just mean servers in your office. There are multiple possible architectures.

Traditional on-premises

Your own datacenter, your own servers, your own hypervisor (VMware, Hyper-V, OpenStack). Maximum control, maximum responsibility.

Advantages

  • Absolute control of hardware and software
  • No dependency on internet for operation
  • Data never leaves your physical premises

Limitations

  • Very high capital cost
  • Dedicated team for management
  • Slow and difficult scaling
  • No SLA from an external provider

Relationship with Azure

You can extend Azure to your on-premises with Azure Arc

Azure Stack HCI

Microsoft-certified hardware that runs on your premises, managed like Azure from the Azure portal. You get Azure APIs and the Azure model, but the hardware is wherever you say.

Advantages

  • Azure APIs and tools on-premises
  • Updates managed by Microsoft
  • Native integration with Azure (backup, monitor, Defender)
  • Compliance: data physically on your premises

Limitations

  • Specific certified hardware (not just any server)
  • Significant hardware cost
  • You need staff to manage the physical hardware

Relationship with Azure

It's a Microsoft product — literally Azure in your datacenter

Colocation (colo)

Your hardware in a third party's datacenter (Equinix, NTT, Tier 4 providers). You own the hardware; the datacenter provides space, power, cooling, and connectivity.

Advantages

  • Control of the hardware
  • Better datacenter facilities than most companies
  • Direct connectivity to multiple ISP providers
  • No cost of building your own datacenter

Limitations

  • Still buying and managing hardware
  • Not as flexible as cloud
  • Staff for remote or on-site management

Relationship with Azure

You can connect colo to Azure via ExpressRoute for private, high-speed connectivity

Hybrid cloud — Azure Arc and Azure Stack

Hybrid cloud is the most common model in enterprises that have run on-premises infrastructure for years. Microsoft offers specific tools for this model.

Azure Arc — Extends Azure anywhere

Azure Arc lets you manage servers, Kubernetes clusters, SQL databases, and Azure services in any cloud or on-premises, from the Azure portal, with the same tools.

On-prem Linux/Windows servers

Appear in the Azure Portal as resources. Azure Monitor, Defender, Updates apply.

Kubernetes clusters on AWS/GCP

Managed from Azure. GitOps, Azure Policy applied.

On-premises SQL Server

Azure Arc-enabled SQL → telemetry, assessments, Defender for SQL.

Azure services anywhere

App Service, Kubernetes, Data Services on your hardware, managed by Azure.

Real hybrid cloud use cases

  • Burst to public cloud: Batch processing that normally runs on-prem. During peaks (month-end, fiscal year-end), it "bursts" to Azure for additional capacity. On-prem handles the base load; Azure handles the peaks.
  • Gradual migration: A company can't move everything to cloud at once. They move new apps first, then the web tier, then the database. Years 1-3: hybrid. Year 4+: full cloud.
  • Data at the edge, processing in cloud: IoT sensors in factories → process critical data locally (low latency) → send summaries to Azure for analytics (BI, ML).
  • Compliance data residency + new apps: Banking data stays on-prem due to regulation. New risk analysis app in Azure. Azure Arc connects both with unified governance.

Hybrid connectivity in Azure

Encrypted VPN connection over the internet. Economical, up to ~1 Gbps. For hybrid setups without strict SLA needs.

Private dedicated connection (not over the internet) via a telecom partner. 1–100 Gbps. Guaranteed SLA. For critical workloads.

Multi-cloud — The new enterprise reality

According to Flexera 2024, 89% of large enterprises use multiple clouds. Multi-cloud is no longer optional for many organizations.

Why do companies use multi-cloud?

Avoid vendor lock-in

Not depending on a single provider to negotiate better prices and not being vulnerable if the provider raises prices.

Best-of-breed per service

AWS Kinesis for streaming, Azure OpenAI for AI, Google BigQuery for analytics. Using the best service from each provider.

Corporate acquisitions

Company A uses Azure. It acquires Company B, which uses AWS. Multi-cloud by default.

Regulatory requirements

Some countries require using local or specific cloud providers for certain data.

Cross-provider redundancy

If Azure has a regional outage, failover to AWS. The probability of both failing simultaneously is extremely low.

Team with multiple expertise

A company has devs with AWS expertise and others with Azure. Each team uses what they know best.

The complexity of multi-cloud

Multi-cloud isn't free of complexity. Each cloud has its own: IAM model, CLI/APIs, networking, monitoring, compliance. You need teams that master multiple platforms. Egress costs between clouds can be significant. Governance becomes complex. Azure Arc can manage resources from other clouds from within Azure — one way to reduce this complexity.

Exhaustive model comparison

DimensionPublicPrivateHybridMulti-cloud
Initial cost0Very highMedium0 (per cloud)
Hardware controlNoneTotalMixedNone
ScalabilityUnlimitedLimited to HWMixedUnlimited (multi)
Operational managementLowVery highHighVery high
Long-term costVariableFixed (high)Variable+fixedVariable (multiple)
Physical securityProvider'sYoursMixedEach provider's
Setup timeMinutes3-12 months2-6 monthsMonths (governance)
Vendor lock-inHigh (1 vendor)Your ownPartialLow
ComplexityLowHigh (yours)HighVery high
Data residency complianceDepends on regionTotal controlFlexibleMulti-jurisdiction
Best for startups✓✓✓✗✗✗
Best for legacy enterprise✓✓✓✓✓✓✓✓

Real decision tree

1

Do you have regulatory requirements that mandate hardware PHYSICALLY on your premises?

YES:→ Private Cloud (on-premises or Azure Stack HCI)
NO:Continue →
2

Do you have legacy infrastructure you can't move to cloud in the short term?

YES:→ Hybrid Cloud (keep legacy on-prem, new apps in Azure)
NO:Continue →
3

Does your company already have significant investment in another cloud provider (AWS, GCP)?

YES:→ Multi-cloud (keep the other provider + add Azure for new services)
NO:Continue →
4

Do you need specific services only offered by another provider (e.g., BigQuery, AWS Redshift)?

YES:→ Multi-cloud (Azure for the core + the other provider for that service)
NO:Continue →
5

None of the above?

YES:→ Azure Public Cloud. Default for new projects. Maximum agility, less complexity.

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Test what you just learned

A healthcare company needs to comply with strict regulations on where its data resides and cannot use shared infrastructure. Which cloud model should it choose?

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